No matter what the promoters may tell you, gifting clubs are illegal. They are unlawful pyramid schemes. Gifting clubs and pyramids have not been approved by the Oregon Attorney General, local district attorneys, or the Division of Finance and Corporate Securities. Operating or participating in a pyramid scheme violates Oregon's Unlawful Trade Practices Act, which imposes civil penalties of up to $25,000 per violation.

Gifting clubs and pyramid schemes may also violate Oregon securities laws by virtue of being investment contracts. Oregon law requires securities to be registered and licenses for persons engaged in transacting business in securities. A violation of the securities laws could subject a person to civil penalties of up to $20,000 per violation, or criminal prosecution as a class B felony.

The IRS does not recognize gifting clubs or pyramid schemes and considers all money gained from these schemes to be reportable income. Failing to report income from pyramid schemes on your tax return, or attempting to hide such monies may subject you to severe federal civil and criminal penalties.